Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Earnings (Loss) from Continuing Operations Before Tax by Jurisdiction

Earnings (loss) from continuing operations before tax by jurisdiction are as follows:



	Year Ended December 31,
	2017	2016	2015
	(In $ millions)
US	262	326	231
International	813	704	257
Total	1,075	1,030	488

Schedule of Income Tax Provision (Benefit)

The income tax provision (benefit) consists of the following:



	Year Ended December 31,
	2017		2016		2015
	(In $ millions)
Current
US	201		(22	)	28
International	158		60		152
Total	359		38		180
Deferred
US	(110	)	108		54
International	(36	)	(24	)	(33	)
Total	(146	)	84		21
Total	213		122		201

Schedule of Effective Tax Rate Reconciliation

A reconciliation of the significant differences between the US federal statutory tax rate of 35% and the effective income tax rate on income from continuing operations is as follows:



	Year Ended December 31,
	2017		2016		2015
	(In $ millions, except percentages)
Income tax provision computed at US federal statutory tax rate	376		361		171
Change in valuation allowance	218		(18	)	124
Equity income and dividends	(87	)	(60	)	(33	)
(Income) expense not resulting in tax impact, net	(157	)	(152	)	(32	)
US tax effect of foreign earnings and dividends	521		302		15
Foreign tax credits	(759	)	(293	)	(4	)
Other foreign tax rate differentials	(38	)	(48	)	(47	)
Legislative changes	116		4		9
State income taxes, net of federal benefit	12		8		6
Other, net	11		18		(8	)
Income tax provision (benefit)	213		122		201

Effective income tax rate	20	%	12	%	41	%

Schedule of Consolidated Deferred Tax Assets and Liabilities

Significant components of the consolidated deferred tax assets and liabilities are as follows:



	As of December 31,
	2017		2016
	(In $ millions)
Deferred Tax Assets
Pension and postretirement obligations⁽¹⁾	143		313
Accrued expenses	50		61
Inventory	10		11
Net operating loss	703		661
Tax credit carryforwards⁽²⁾	478		136
Other	192		161
Subtotal	1,576		1,343
Valuation allowance⁽³⁾	(618	)	(386	)
Total	958		957
Deferred Tax Liabilities
Depreciation and amortization	307		366
Investments in affiliates	427		475
Other	69		87
Total	803		928
Net deferred tax assets (liabilities)	155		29

______________________________


⁽¹⁾	For the year ended December 31, 2017, the pension and postretirement obligations decreased primarily due to $316 million in employer contributions made to the US defined benefit plans (Note 15).


⁽²⁾	For the year ended December 31, 2017, the tax credit carryforwards increased primarily due to internal reorganization transactions made in preparation for the proposed acetate tow joint venture with Blackstone discussed herein and Note 4.


⁽³⁾	Includes deferred tax asset valuation allowances for the Company's deferred tax assets in the US, Luxembourg, Spain, China, Singapore, the United Kingdom, Canada and France. These valuation allowances relate primarily to net operating loss carryforward benefits and other net deferred tax assets, all of which may not be realizable.

Schedule of Activity Related to Uncertain Tax Positions

Activity related to uncertain tax positions is as follows:



	Year Ended December 31,
	2017		2016		2015
	(In $ millions)
As of the beginning of the year	114		158		228
Increases in tax positions for the current year	14		9		13
Increases in tax positions for prior years⁽¹⁾	4		11		76
Decreases in tax positions for prior years	(7	)	(9	)	(126	)
Decreases due to settlements	(6	)	(55	)	(33	)
As of the end of the year	119		114		158

Total uncertain tax positions that if recognized would impact the effective tax rate	100		87		144
Total amount of interest expense (benefit) and penalties recognized in the consolidated statements of operations⁽²⁾	6		(16	)	(12	)
Total amount of interest expense and penalties recognized in the consolidated balance sheets	38		26		43

______________________________


⁽¹⁾	Includes uncertain tax positions related to the Nilit acquisition (Note 4) of $4 million for the year ended December 31, 2017.


⁽²⁾	This amount reflects interest on uncertain tax positions and release of certain tax positions as a result of audit closure that was reflected in the consolidated statements of operations. In addition, for the years ended December 31, 2016 and 2015, the Company also paid an additional $1 million and $12 million, respectively, of previously accrued amounts due to settlements of tax examinations.